Friday, September 20, 2013

Will new carbon rule sink Drake?

The EPA is currently reaching out to stakeholders and industry groups as it crafts its draft rule for regulating existing power plants for GHG emissions. Currently neither the EPA nor the effected industries is clear on what limits the EPA will seek to impose and what degree of flexibility will be afforded to regulated entities in meeting these standards. The chief difficulty with regulating existing plants is that the Clean Air Act affords the primary responsibility of crafting regulations with the States, not the EPA. While the EPA will craft general guidelines (determine the "what"), it will be the State of Colorado that will craft the specific plan ( determine the "how"). It is too soon in the process to tell what EPA's general guideline will look like let alone what the State of Colorado will propose in response.

——— ORIGINAL POST FRIDAY, SEPT. 20, 3:21 P.M. ————

click to enlarge

Pam Zubeck

Drake Power Plant: Are its days numbered?

The Obama administration says it plans to impose restrictions on how much carbon power plants can emit. And that might change how the Drake Task Force performs a study of how and whether to retire the downtown coal-fired power plant.

Or it might not.

City Councilor Andy Pico, a member of the task force, says via e-mail, he's not sure whether the EPA truly will enact such restrictions.

"There is no certainty as to what the rule will entail, what will be required and on what schedule," he says. "Regulatory risk is one of those factors that we've included" in the study, which is analyzing the social, economic and environmental factors of operating Drake years into the future.

Pico says it's likely the task force will discuss the newest development in implementing a carbon restriction at its next meeting on Nov. 6. The group will meet at 1 p.m. at 121 S. Tejon St., fifth floor.

The task force is studying several alternatives for Drake, including: retire the plant in 2033; retire the plant in
2019 with one unit retired in 2016; retire Drake in 2028 and abandon the plant or remediate the site; retire
the plant in 2022; choose timing based on lowest net cost; choose timing based on social, economic and
environmental factors; retire the plant in 2022 and replace capacity with 30 percent renewables, such as
wind; convert Drake to natural gas.

Drake and the Nixon coal plant 10 miles south of Colorado Springs make up 40 percent of the city's generating capability, George Luke, general manager of energy supply with Colorado Springs Utilities told the Utilities Board on Wednesday.

As part of his "emissions control update," Luke outlined the schedule for compliance with regulations restricting emissions of Nitrogen Oxides (NOx) and Sulfur dioxide (SO2). Which was to say that both Drake and Nixon will achieve compliance with their deadlines in 2017 and 2018.

To achieve that will cost ratepayers $245.1 million. Broken down, that means paying $224.35 million for SO2 compliance and $20.7 million for NOx compliance.

Neumann Systems Group, a local company, invented an emissions removal technology that's being installed on Drake. It won't necessarily be used on Nixon; it will be up to each contractor who submits a bid for the Nixon emissions work to choose an emissions-control technology, Luke said.

Neumann's NeuStream technology "shows promise" for removing carbon, energy officer Bruce McCormick said on Wednesday, but there's been no push by Utilities on that front because no regulations are in place.

Environmental groups wasted no time endorsing the idea of limiting carbon emissions. Here's a statement from Environment Colorado and the Sierra Club:

While public health safeguards against mercury, arsenic, soot and other dangerous pollution from power plants exist, there are no federal limits on the carbon pollution that is responsible for climate change and fuels extreme weather. That’s wrong. Today the Environmental Protection Agency announced the first federal standards for carbon pollution for future power plants, setting us on a course to eventually address the largest source of carbon pollution in the nation, America’s aging fleet of existing power plants.

This is a major step toward meeting our obligation to our children and future generations to address the challenge of climate change. With this action, the President and the EPA are ensuring that no future power plants can dump unlimited carbon pollution in the air.

We applaud the President and EPA Administrator Gina McCarthy for setting this important public health and clean air safeguard and we encourage the administration to move forward with strong carbon pollution standards for existing power plants.